Dutch Authorities Nabbs ZKasino’s Crypto Scam suspect, $12.2M Recovered


A 26-year-old ZKasino fraud suspect was arrested on Monday by the Dutch financial crime investigators, he was charged with fraud, embezzlement, and money laundering. His arrest was linked to the rug pull scam that went down on the Web3 gambling network.

The Fiscal Information and Investigation Service of the Netherlands (FIOD) said that the accused apartment was raided, and the authorities found and confiscated physical and digital records. Also, it took into custody some assets valued at a whopping 11.4 million euros ($12.2 million), including real estate and cryptocurrencies.

ZKasino Gaming platform fraud

At the time of ZKasino’s launch which originally started as a decentralized gambling platform, there were already over 10,000 investors who had bridged more than $33 million worth of crypto on the platform. Investors are now pleading for the refund of their money.

Back in March, the on-chain gambling platform managed to raise a whopping $26.2 million with a valuation of $350 million. Unfortunately, after the launch, the token redeeming policies changed, leaving investors unable to reclaim their bridged Ethereum after 30 days as promised.

The technical setup of the smart contract on the blockchain suggests that the intention wasn’t to provide any return. This made many suspect it was a rug-pull scam.

Two years back, Gala Games, a blockchain gaming company utilizing pNetwork, a cross-chain communication bridge, narrowly escaped a rug-pull scam. This incident led to a massive 90% drop in its native coin, which caused concerns for users and investors about its safety.

Crypto scam is on the rise 

Crypto scams are on the rise globally, and it is becoming a major worry. The FBI recently revealed a substantial increase in losses due to crypto scams in 2023, with a staggering 53% surge in cases in the United States alone.

Just last month, there were reports of a notorious fraudster group resurfacing. However on-chain detectives and investigators are determined to hold the bad actors accountable as several crypto cons have been uncovered over the years.

Though the FIOD statement did not directly mention the suspect’s role, the chat with The Block confirmed his involvement with the gambling team. The accused appeared before a magistrate on Thursday, and his detention was extended for two more weeks.

It was hinted that there will be the possibility of more arrests related to ZKasino in the future.

This whole alleged scam on the decentralized gambling network has made big firms like Big Brain Holdings, a capital venture firm, hesitant to invest.

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